The most recent Canadian deal making tables showed how hard investment banks had to work to make up for the dearth of mining deals last year.
Other industries had to "pick up the slack" of the slow mining mergers and acquisitions environment, said Doug Guzman, head of global investment banking at RBC.
On the flip side, mining companies have been busy slashing costs and bolstering cash reserves to protect against sagging commodity prices (particularly gold) and share prices.
So, it's no wonder that Goldcorp Inc.'s $2.6-billion hostile bid for competitor Osisko Mining Corp. drew attention, especially with the attractive premium for the would-be acquirer.
But how would the Goldcorp's takeover compare to the mining mega-mergers of the last decade?
Goldcorp's purchase would be No. 19 on a list of the 50 largest deals in the 10 years to Jan. 13, assuming no sweetener was added to the bids. According to data from Thomson Reuters, that would sandwich the potential deal between the $2.73-billion buyout of Bema Gold Corp. by Kinross Gold Corp. in 2006, and the 2005 acquisition of Falconbridge Ltd. by Noranda Inc. for $2.52-billion. These figures are net of the target's debt.
Goldcorp's largest purchase in that period would be sixth on the list, when it bought Glamis Gold. Ltd. in 2006 for $8.7-billion.
Here are some other interesting facts from the Thomson Reuters mining deal list:
- The largest deal in the decade was the $43-billion blowout for Alcan Inc. by Rio Tinto Canada Holdings Inc. in 2007. That boosted the annual investment banking deal tally to more than $86-billion that year.
- The second- and third-largest deals both came in 2006 and both involved nickel, copper and cobalt mining targets. Cia Vale do Rio Doce SA acquired Inco Ltd. for $18.4-billion, and Xtrata PLC acquired Falconbridge for $18.2-billion.
- Last year, the value of mining deals with any Canadian involvement made up just $9.8-billion of the country’s M&A. But in 2004 the landscape was even quieter, with the total industry value at just $5.3-billion. All other years have been more active.